- Video Surveillance, periodic pre-counting of receipts, poligraphy [sic], urinalysis, personal search, metal detection devices, long and short term statistical analysis, medical testing, and background research may all be used by BCC Associates to monitor performance and compliance, and may be used as cause for dismissal.

(Lazan Aff., Ex. E at #226) (emphasis added)

Plaintiff Joyce Atkinson worked for BCC at the RIPC from June 1989 until March 1990. (Pl. Dep. at 53-55) Plaintiff's job consisted of counting, with the assistance of a machine, TBTA's daily toll receipts. (Id. at 62-65) TBTA played no role in hiring plaintiff. (S. Conant Dep. at 434)

Plaintiff testified that, at her initial job interview, BCC informed her that "there would be random drug tests." (Pl. Dep. at 73) Later, she signed an agreement consenting to such tests. (S. Conant Decl., Ex. 8) In March 1990, ten BCC employees, including plaintiff, tested positive for cocaine, and all were dismissed. (Pl. Dep. at 94; S. Conant Dep. at 446)

Plaintiff filed her complaint on April 29, 1992.
*fn1"
Plaintiff claims that BCC violated her rights under Fourth and Fourteenth Amendments of the United States Constitution, and under Article I, Sections VI and XII of the New York State Constitution. (Pl. Mem. at 2) Specifically, plaintiff claims that BCC violated her Fourth Amendment rights when "acting under color of state law, [BCC] terminated Plaintiff after subjecting her to a random drug test without individualized, reasonable suspicion that she had engaged in illegal drug use." (Compl. P 44) Plaintiff claims also that BCC violated her due process rights under the Fourteenth Amendment because

acting under color of state law, [BCC] failed to provide Plaintiff with an opportunity to be heard before placing false, stigmatizing references pertaining to drug use in her employment record that have been and likely will be disseminated to potential employers and has hindered and will, in the future, hinder Plaintiff's ability to obtain employment.

(Compl. P 45)

Plaintiff and defendant both move for summary judgment. Defendant BCC argues that it is entitled to summary judgment, because BCC is a private entity not engaged in state action, and therefore did not act "under color of state law" when it fired plaintiff.

Whether "state action" exists here depends, as a preliminary matter, on the meaning of the Contract and the extent of TBTA's involvement in the business of BCC. Plaintiff claims that TBTA required BCC to test for drug use, because the Contract "requires defendant to perform urine tests of its employees for drugs." (Pl. Mem. at 5) BCC denies that TBTA had any role in such testing, and argues that BCC was free to decide whether and how to test. As explained below, there is no genuine issue of fact as to whether BCC was obligated by TBTA to test its employees for drug use; it was not.

Plaintiff is correct that, as a general matter, TBTA is closely tied to BCC. Plaintiff claims, and defendant admits, the following facts: BCC performs the Contract at a TBTA-owned building; TBTA owns much of the equipment BCC uses -- although much of it was developed by and purchased from BCC (S. Conant Dep. at 15-17); TBTA pays BCC's maintenance costs, and telephone and electric bills; TBTA monitors and investigates BCC's employees, and uses video cameras and metal detectors to protect against theft; and several TBTA representatives are present at BCC for a few hours every business day. (Pl. Rule 3(g) Statement & Def. Response PP 16-20, 23-26) Moreover, defendant admits that TBTA has been BCC's principal client, although defendant has sold equipment to and advised other clients on occasion. (S. Conant Dep. at 64-66, 509, 514; Def. Mem. at 7 n.5)

However, despite these close ties, there is no evidence that TBTA had a role in BCC's drug testing program, or in the particular test that led to plaintiff's dismissal. (B. Conant Dep. at 42) First, the conduct of both TBTA and BCC shows that BCC was not obligated to test for drug use. TBTA did not request or suggest that BCC test its employees for drug use prior to BCC's proposal in 1984. (B. Conant Dep. at 17-26; S. Conant Dep. at 12-13, 22-27) TBTA's only previous involvement in drug testing at BCC was when it volunteered to help BCC with testing in 1985. (Id. at 37-38) Although TBTA assisted in the administration of drug tests before plaintiff was hired, TBTA had no role at all in that activity while plaintiff was employed at BCC. (B. Conant Dep. at 36-41; S. Conant Dep. at 82, 101). BCC has never dismissed or taken disciplinary action against an employee at TBTA's request. (S. Conant Dep. at 423-24)

Moreover, before plaintiff was hired BCC made at least one personnel decision in response to drug test results which was in direct conflict with TBTA's expressed preference. In that instance, several BCC employees tested positive for marijuana use. (B. Conant Dep. at 28-29, 40-41, 86-87) TBTA asked BCC to fire those employees, but BCC refused. (Id. at 28-29, 41)

A. It was part of the procedure that we, as a contractor, were obligated to perform.

Q. Pursuant to the contract?

A. Yes.

(B. Conant Dep. at 47) Plaintiff cannot bootstrap this "admission" that BCC was "obligated to perform" into an actual contractual obligation to test. Notwithstanding plaintiff's ability to manipulate the Conants' deposition testimony, there is one aspect of this case plaintiff cannot vary: the plain language of the Contract. The Contract contains no drug testing requirement. In contrast, the Contract provides that it is up to BCC to decide whether to test for drug use, and if BCC tests it is also up to BCC to decide whether to dismiss an employee who tests positive. (Lazan Aff., Ex. E at #226) The Contract says "may," not "shall." (Id.) Conclusory snippets of testimony cannot be read to change that meaning unless there is evidence of conversations or other exchanges between BCC and TBTA to show that actual practice differed from the meaning of Contract. As discussed above, the evidence shows that practice was consistent with the language of the Contract.

Based on the above facts, BCC was not obligated by TBTA to test its employees for drug use.

Under any of the applicable tests,
*fn3"
the undisputed facts show that BCC did not act "under color of state law." As found above, there is no genuine issue of fact as to whether BCC was obligated by TBTA to test for drug use. BCC is a private company performing work for a public agency, and BCC's voluntary decisions to test plaintiff for drug use and then fire her do not qualify as state action under any of the tests.

Plaintiff argues that TBTA and BCC have a symbiotic relationship because, among other things, (1) BCC receives from TBTA certain subsidies -- rent, equipment, repairs, and security; (2) BCC depends on TBTA as its only significant client; and (3) TBTA has a "considerable amount of impact on how defendant treats its personnel." (Pl. Mem. at 51) Plaintiff relies on Burton, supra, and Holodnak v. Avco Corp., 514 F.2d 285 (2d Cir.), cert. denied, 423 U.S. 892, 46 L. Ed. 2d 123, 96 S. Ct. 188 (1975), in which the Second Circuit held that a defense contractor which fired an employee was a state actor.

At the outset, plaintiff has not shown that TBTA has a "considerable amount of impact" on how BCC conducts its drug testing. In contrast, as stated above, the undisputed facts show that TBTA had no impact at all. Therefore, plaintiff's argument is simply that BCC and TBTA have a symbiotic relationship because TBTA subsidizes BCC and is BCC's only major client.

The Supreme Court has held that the acts of private companies "do not become acts of the government by reason of their significant or even total engagement in performing public contracts." Rendell-Baker v. Kohn, 457 U.S. at 841. In Rendell-Baker, the Supreme Court found that there was no state action because, despite defendant's connections to the government, defendant was a private school free to make its own personnel decisions. "The provision of services to a state entity does not establish state control, even where, as here, the private contractor's sole business is the performance of public contracts." Rodriguez-Garcia v. Davila, 904 F.2d 90, 97 (1st Cir. 1990) (citing Rendell-Baker v. Kohn, 457 U.S. at 841). Nor does not receipt of state subsidies justify a conclusion of state control. Rodriguez-Garcia v. Davila, 904 F.2d at 97 (citing cases). In other words, the test is "whether the government exercised coercive power or provided such significant encouragement that the choice to fire [plaintiff] must be deemed to be that of the government." Id. (citing cases). There is no evidence that such power was exercised or such encouragement given.

Moreover, there is no doubt here that BCC is a private entity. The Court in Burton, noted that whether an entity is private or public depends on its structure and relationship to the governmental unit. Burton, 365 U.S. at 724. BCC does not operate in a public setting in the sense of dealing with the public, and does not perform a public activity. Although the RIPC, where BCC operates, is a government-owned building, it is not a public accommodation such as the restaurant in the municipal parking garage in Burton. Neither is BCC engaged in the kind of public activity as the defense contractor in Holodnak v. Avco, supra. Several courts have held that private conduct by a private entity is not state action, even when the entity is closely related to the state. See Thomas v. Cannon, 751 F. Supp. 765, 768 (N.D. Ill. 1990) (private company under contract with Chicago Transit Authority to provide transportation services not a state actor); Mineo v. Transp. Mgt. of Tennessee, Inc., 694 F. Supp. 417, 419, 424 (M.D. Tenn. 1988) (no symbiotic relationship even though private company's "sole function . . . was to manage and operate Nashville's transit system" and even though government supplied company with "equipment, office space, furniture and supplies"); Boudette v. Arizona Public Serv. Co., 685 F. Supp. 210, 213 (D. Ariz. 1988) (privately-owned public utility corporation which leased facilities from state was not state actor when it terminated plaintiff's electricity, because state did not profit from challenged conduct and was not financially "integrated" with defendant).

Moreover, "where one starts with an admittedly private institution the question is not what tests show its actions are not attributable to the state, but, rather, what shows they are attributable." Johnson v. Pinkerton Academy, 861 F.2d 335, 337 (1st Cir. 1988). Therefore, plaintiff here has the burden of showing "the State is responsible for the specific conduct of which the plaintiff complains," Blum v. Yaretsky, 457 U.S. 991, 1004, 73 L. Ed. 2d 534, 102 S. Ct. 2777 (1982) (emphasis in original), a burden which plaintiff has not met. To qualify as state action, the conduct in question

'must be caused by the exercise of some right or privilege created by the State or by a rule of conduct imposed by the State or by a person for whom the State is responsible,' and 'the party charged with the [conduct] must be a person who may fairly be said to be a state actor.'

Finally, plaintiff's reliance on Holodnak v. Avco Corp., supra, is misplaced. In Holodnak, the Court found that the defendant was engaged in state action when it violated the First Amendment rights of an employee by firing him for writing a magazine article critical of the company's labor relations. Holodnak, 514 F.2d at 289-90. All the land and most of the buildings and equipment used by the defendant, a defense contractor, were government-owned, and the majority of work at defendant's plant was under government contract, involving the construction of defense-related equipment. Holodnak, 514 F.2d at 289.

Holodnak is distinguishable from this case in at least three ways: (1) the defendant employer was engaged in a core function of the federal government, defense; (2) the defendant's activity occurred during a war, the Vietnam War; and (3) the level of government supervision was greater. In contrast, BCC was not engaged in a core function of the government -- in fact, private banks previously had counted TBTA receipts; there was no national emergency related to BCC's business; and the level of supervision by TBTA was less.

It is true that here, as in Holodnak, the state owned the land and equipment, BCC did not pay rent, and the state maintained a presence to assure contract compliance. Holodnak, 514 F.2d at 289. However, most of the work done at the defendant's plant in Holodnak "was performed under contract for the Department of Defense, the Army, Navy, and Air Force." Holodnak, 514 F.2d at 289. The Court in Holodnak stressed that its decision depended not only on the fact that the defendant operated for the "mutual benefit" of the defendant and the government, but that the government's benefit was its "constitutional interest in raising and supporting an Army, and providing and maintaining a Navy." Holodnak, 514 F.2d at 289 (citing U.S. Const. Art. I, § 8, cls. 12, 13) In contrast, in this case there is no "peculiar relationship [which] confers on each an incidental variety of mutual benefits . . . ." Burton, 365 U.S. at 724 ("restaurant is operated as an integral part of a public building devoted to a public parking service"). It is not enough that the job is helpful to the state. See Jensen v. Farrell Lines, Inc., 625 F.2d at 386-87.

In her discussion of the "close nexus" test, plaintiff relies on Skinner v. Railway Labor Executives' Assoc., 489 U.S. 602, 109 S. Ct. 1402, 103 L. Ed. 2d 639 (1989), in which the Supreme Court ruled that certain 1402 (1989), in which the Supreme Court ruled that certain regulations promulgated by the Federal Railroad Administration implicated state action. The regulations at issue in Skinner prohibited employees from using or possessing alcohol or controlled substances at work, and from reporting for work while under the influence of such substances. Skinner, 109 S. Ct. at 1408. The regulations required drug testing of employees who were involved in certain train accidents, and authorized, but did not require, drug testing of employees who violated certain safety rules. 109 S. Ct. at 1407. The regulations specified that an employee who refused to submit to testing, required or not, must be withdrawn from service. 109 S. Ct. at 1412. The regulations pre-empted state laws and were intended to supersede collective-bargaining agreements and arbitration-awards. 109 S. Ct. at 1412.

In contrast, none of the above requirements is present here. TBTA has not promulgated drug testing regulations, and TBTA does not require drug testing. TPTA does not have a policy authorizing drug testing when other agreements or awards prohibit it. TBTA does not require that BCC fire employees who refuse to submit to drug testing, or who test positive for drug use. In fact, as stated above, on one occasion, when TBTA asked BCC to fire several BCC employees who tested positive for drug use, BCC refused.

Moreover, Skinner presented a facial challenge to a federal regulation which the Court held had "specific features [which] combine to convince us that the Government did more than adopt a passive position toward the underlying private conduct." Skinner, 109 S. Ct. at 1411. This case does not present a facial challenge to any regulation. Instead, plaintiff challenges only the policies and activities of a private company.

Plaintiff is correct that the close nexus test is satisfied, so that private conduct becomes state conduct, where the government requires certain action. The Court in Skinner found in the regulations "clear indices of the government's encouragement, endorsement, and participation . . . sufficient to implicate the Fourth Amendment." Skinner, 109 S. Ct. at 1412. Thus, plaintiff claims that Skinner stands for the proposition that even regulations which give private companies a choice about whether to test for drug use implicate state action, when that choice is accompanied by "clear indices of the government's encouragement, endorsement, and participation."

However, even assuming Skinner stands for such a proposition, there are no "clear indices" of TBTA's participation here. Again, TBTA did not promulgate regulations, and the Contract did not provide that TBTA would play any role in BCC's drug testing. Plaintiff gleans from conversations between TBTA and BCC that TBTA indicated a "preference for testing." (Pl. Mem. at 44 n.20) However, as discussed in detail above, TBTA's comments never rose to the level of the "encouragement, endorsement, and participation" present in Skinner. 109 S. Ct. at 1412.

BCC decided independently to test its employees for drug use, because of its concerns about security. Whether that decision was wise or fair is not at issue -- the Constitution "erects no shield against merely private conduct, however discriminatory or wrongful." Blum v. Yaretsky, 457 U.S. at 1002 (quoting Shelley v. Kraemer, 334 U.S. 1, 13, 92 L. Ed. 1161, 68 S. Ct. 836 (1948)).

C.

State Compulsion

The "state compulsion" test asks whether a private actor who violates someone's constitutional rights under the "compulsion" or framework of a state law offends the Fourteenth Amendment. Adickes v. S.H. Kress & Co., 398 U.S. 144, 169-70, 26 L. Ed. 2d 142, 90 S. Ct. 1598 (1970) (black woman who was denied service by restaurant could meet state action requirement by showing a state-enforced custom compelling segregation). Under this test, the private party's actions are "otherwise chargeable to the State . . . when the State, by its law, has compelled the act." Albert v. Carovano, 824 F.2d at 1341 (citing cases). A private party becomes a state actor when the state has provided "significant encouragement, either overt or covert," for the actions of the parties. Blum, 457 U.S. at 1004; Rendell-Baker, 457 U.S. at 840.

As in Hadges v. Yonkers Racing Corp., "there is no evidence that a State official participated in [BCC's] decision to [fire plaintiff]." 918 F.2d at 1083. In Rendell-Baker v. Kohn, 457 U.S. 830, 73 L. Ed. 2d 418, 102 S. Ct. 2764 (1982), the Supreme Court held that a private school's decision to fire a teacher was not state action, even though the state extensively financed and regulated the school, because the ultimate decision was not "compelled or even influenced by any state regulation." 457 U.S. at 841. As stated above, TBTA's actions here resemble "mere approval of or acquiescence in," BCC's actions, rather than compulsion. Blum, 457 U.S. at 1004.

D.

Public Function

The Supreme Court has held that under the "public function test", "the relevant question is not simply whether the private group is serving a 'public function.' [It] is whether the function performed has been 'traditionally the exclusive prerogative of the State.'" Rendell-Baker, 457 U.S. at 842 (emphasis in original) (holding that education is a public function, but is not the exclusive prerogative of the state); see also Rodriguez-Garcia, 904 F.2d at 98 (maritime shipping not exclusive prerogative of state); Ponce v. Basketball Fed'n of Puerto Rico, 760 F.2d 375, 377 (1st Cir. 1985) (regulation of amateur sports not the exclusive prerogative of the state). "While many functions have been traditionally performed by governments, very few have been 'exclusively reserved to the State.'" Jensen v. Farrell Lines, Inc., 625 F.2d at 385 (quoting Flagg Bros., Inc. v. Brooks, 436 U.S. at 158); see also Lefcourt v. Legal Aid Soc'y, 445 F.2d 1150, 1155 (2d Cir. 1971) (substantial governmental funding of Legal Aid Society inadequate to create state action, absent showing of governmental control, regulation, or interference).

If the private actor is functioning as the government, that private actor becomes the state for purposes of state action. See, e.g., Marsh v. Alabama, 326 U.S. 501, 506, 90 L. Ed. 265, 66 S. Ct. 276 (1946) ("the owners of privately held bridges, ferries, turnpikes and railroads may not operate them as freely as a farmer does his farm"); Gorenc, 869 F.2d at 508 (citing Terry v. Adams, 345 U.S. 461, 469-70, 97 L. Ed. 1152, 73 S. Ct. 809 (1953)). For example, in Marsh v. Alabama the Supreme Court held that a company-owned town was acting like a municipality and as such could not abridge constitutional rights. Marsh v. Alabama, 326 U.S. at 509.

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